STTCOMP SRO, FA Long
Ordinary Shares on issue: 264m
Cash: $1.6m roughly
MC: $3.4m
EV: $1.8m
ShareRoot is a Silicon Valley based SaaS platform that works with brands and digital agencies to easily find and legally source user generated content (UGC). ShareRoot's platform can source content created by everyday consumers from popular social media platforms such as Instagram, Facebook and Twitter.
Strong customer validation: with established blue chip client base including Universal Pictures, McDonalds, Costco and eBay. Rapidly growing list of over 25 US customers, bringing over 45 brands
Highly scalable business model: strong recurring SaaS subscription-based revenue model, with minimal fixed cost base
Clear growth strategy: continuing international expansion, further channel partnerships and launch of enterprise package
Positioned to become a major player within the large and growing $600 billion marketing ecosystem
OK so above is the all marketing mumbo jumbo that is good to know but the real reason I like this is because it's probably the cheapest revenue generating tech company on the asx that actually has a product in a huge sector that leads to real business benefits.
Let's look at User generated content:
1) 80% of all online content is user generated.
2) 40% of consumers seek out some sort of UGC before making a purchase.
3) 74% of customers have a more positive view of a brand after interacting with them via digital media.
4) 84% of millennials, and 70% of baby boomers say UGC plays a role in purchasing decisions.
5) 51%more trustworthy than other forms of media.
Now what happens to organisations that use SROs technology? UCLA in the US use SROs technology and it had 2,050 total engagements prior to SRO and then nearly doubled it's engagements to 3,939 after the use of this technology.
Now from a costing perspective due to the pricing model when revenue increases substantially cost only increase minimally. Due to their recurring model SRO has substantially increased its revenues and at the same time substantially decreased monthly costs.
So here is where they currently are at:
Monthly revenues: 140k
Monthly costs: $250k
Forecast: based on previous 6 months performance the revenue levels have nearly doubled every 3 months. Based on this performance SRO potentially will be cash flow positive in 3 months time. Noah Abelson Managing Director, Led US sales from $0 to $3.1M in Q3 alone for AdParlor (Facebook Advertising company).
So we can get all of this for less than a 2m EV. Its quite illiquid now however the credit raising at 1c should provide increased volume. funnily enough the director only raised 450k when he had 1.2m in the bank already. So obviously the director is thinking this is the last raise he will need to do before they become cash flow positive.
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